21 Jan Importance of Validating IT Systems & Accounting Software
Modern accounting practice mainly focuses on automated data processing, thus changing its traditional environment with a number of businesses utilizing information technology (such as accounting software) in the process of collecting and analyzing pieces of information. With all the benefits it’s offering, the popularity of accounting software is indeed on the rise.
Accounting software is a type of computer program that eases the burden of managing a company’s financial transactions. This software helps businesses utilize resources efficiently, decreases the costly bookkeeping fees and increases accuracy by eliminating human errors.
However, a lot of the businesses do not understand the importance of ensuring the accounting software is correct. This is particularly true for SME’s who don’t have the knowledge and resources to validate their accounting software.
The concerning thing is that the majority of white-collar crime occurs via information technology especially the accounting software— thus, accounting software and other information technology software has become the auditor’s tool and at the same time the subject of its audit.
Consequently, internal/external controls play a significant role in ensuring the effectiveness of the overall accounting software/system.
An evaluation may include the following:
- Determining the duties among employees
- Deciding who are authorized to implement particular activities
- Developing evaluation and verification procedures
The following checklist can help ensure that there are no oversights and can be tailored depending on the business and the accounting software a company has in place:
- Sharing of duties and processes by requiring critical transactions to be reviewed by others
- Identifying key personnel to take ownership for a specific transaction
- Limiting access to the accounting software
- Regularly updating passwords and user access
- Implementing standardized documentation for all records
- Periodically calculating trial balances
- Investigating discrepancies as soon as possible
- Utilizing the accounting system in tacking physical assets
- Strict and consistent checking of all data entries to ensure accuracy
- Ensure balance matches by regular accounting reconciliations
- Periodic training and updates with the accounting software provider
The implementation of successful accounting software is not a result of luck or chance— it should be the outcome of proper implementation and dedication of the team members. Business must select an accounting software provider who offers best practices, proven track record and results by utilizing methods that come from relevant and intensive experience in the industry.
At Averyx, we utilize proprietary software in order to perform computerized audit techniques such as CATS on your accounting software to ensure that all the import is correctly and effectively and efficiently being processed as output. Call us today!